The average 401(k) balance is back at the level it was in 2004, according to a report by the Employee Benefit Research Institute—essentially wiping out the past five years of investing.

The median 401(k) balance was $26,578 in June, and the median IRA balance was $28,955, EBRI said.  Defined contribution plan balances declined 16.4% from the end of 2007 through June, and IRA balanced declined 15%. At the end of 2007, only 40.6% of American families had at least one member invested in a 401(k) plan. However, 66.2% of families owned at least one IRA.

“Americans have a great deal of work to do after the tremendous loss of wealth in 2008 to ensure financial security in retirement,” said Craig Copeland, a senior research associate and author of the EBRI report.

Of course, the higher a participant’s balance, the greater their losses during the recession. While the average plan dropped 16.4% in the 18 months since the end of 2007, for families with more than $100,000 in income, the losses averaged 22%, and those earning the top 10% saw their balances drop 28%.

However, with the economy showing some signs of renewed strength, Copeland said, Americans should take heart that they have an opportunity to restore their retirement savings.

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